3 Reasons Why Ultra High Yield Realty Income Is a Buy After Its Latest Earnings Report

Shares of Realty Income (NYSE: O) have been under pressure since the pandemic. Even after a recent uptick, they are down roughly 25% from their 2020 high. But the real estate investment trust (REIT) hasn't really changed much over that span. If anything, the company has become more attractive, with its third-quarter 2026 earnings underscoring that.

Indeed, despite rising interest rates, it was another fairly boring quarter, with a modest increase to the company's guidance and yet another dividend increase. Here's why dividend lovers should still view Realty Income as a foundational investment.

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1. Realty Income: "Boring is good"

"Boring is good" is in quotes because those are the words of Realty Income's CFO, Jonathan Pong. They came up during a conversation about the potential impact of rising interest rates on the giant net-lease real estate investment trust (REIT). That comment basically summarized the entire ethos of Realty Income, which trademarked the nickname "The Monthly Dividend Company." You have to be reliable, to the point of being boring, to back up a nickname like that.

The third quarter of 2026 was another quarter in which Realty Income quietly went about its business, even as real estate markets faced headwinds. It's true that rising rates will increase the cost of capital, but that didn't stop Realty Income from finding a way to make $2.6 billion in profitable investments (with a 170-basis-point spread).

There are several reasons for this success. First, Realty Income is massive, with a globally diversified portfolio of over 15,500 properties. It sees almost every significant deal. Second, it has an investment-grade-rated balance sheet, which, along with its size, affords it advantageous access to capital markets. And, third, the REIT has also been expanding its sources of funding, from strategic property sales (capital recycling) to the creation of an institutional asset management business. There are more points that could be made here, but the big story is that Realty Income wasn't waiting for rates to rise before addressing the issue; it was already prepared. Which is exactly what you'd expect from a company that's bold enough to call itself "The Monthly Dividend Company."

2. Realty Income raised its guidance

Realty Income had a solid quarter, which is good news. But it also raised its full-year guidance, which basically tells the market that the REIT is operating just as well as it always has. The raise was modest, taking the adjusted funds from operations (FFO) guidance range from $4.44 to $4.45 per share up to, wait for it, $4.45 to $4.46. That's not a shocking change, but remember: "boring is good."

Also worth noting, the company maintained its occupancy outlook at 98.5%, which is very strong. Same-store rent growth remained at 1.1%-1.3%. And management reaffirmed the goal of hitting $10 billion in acquisitions, noting it was already at $7.9 billion, roughly 80% of the way there. The guidance raise was good news; the fact that Realty Income's business is progressing in line with expectations is probably even better news.

3. Realty Income increased its dividend again

There's one more easy-to-overlook event from the quarter that dividend investors will find important: Realty Income increased its dividend. The hike was modest, with the dividend rising just 0.7% year over year. However, the dividend has been increased annually for 32 years and is generally hiked a little bit every quarter. The adjusted FFO payout ratio is a very reasonable 73%.

It probably shouldn't be a shock to anyone that "The Monthly Dividend Company" has a well-supported and growing dividend. But it is one more piece of the dividend story that this quarter's earnings highlight, and it shouldn't be ignored. Slow and steady is what Realty Income is going for. Sure, that's kind of boring, but as Jonathan Pong pointed out, boring is good.

Realty Income is a foundational dividend investment

Nothing that happened in the third quarter of 2026 changes Realty Income's long-term story. That's the big takeaway: this giant REIT was built from the ground up to survive difficult periods. With a 5.6% yield, it can provide a solid backbone to a diversified income portfolio, allowing you to add lower-yielding but higher-growth stocks to the mix. Realty Income is worth buying after its third-quarter earnings because its earnings proved, again, that this ultra-high-yield REIT isn't likely to surprise you (or keep you up at night worrying).

Reuben Gregg Brewer has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.